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Save Your Tubmans in an MLK, Jr.? Yes, Please.

September 10, 2016

by commonwealth

The day after the announcement in April that Harriet Tubman would be the new face of the $20 bill, the Treasury Department tweeted an image of four major national newspapers heralding the move on their front pages. The New York Times called it nothing short of “the most sweeping and historically symbolic makeover of American currency in a century.” The excitement is well deserved. Recognizing the diversity among our nation’s important historical figures—and making our money more accurately reflect the diversity of today’s America—is a welcome change and a cause for celebration.

Amid the enthusiasm, however, an important fact has been lost: the United States already has a form of money that wears the face of Martin Luther King, Jr., Helen Keller, Chief Joseph, Dr. Hector Garcia, and Marian Anderson: the U.S. Savings Bond.

Since 1998, Series I savings bonds have depicted these leaders. For much longer, the savings bond has represented a patriotic tradition of civic savings in America. But today we face a national savings crisis. News stories and research constantly highlight the financial vulnerability of American households and their inability to cover even modest financial emergencies, let alone large expected costs such as retirement or a child’s education. At the same time, banks are reluctant to open and maintain low-balance savings accounts, which are not profitable. Savings bonds fill this critical market gap of general purpose, low-balance, no-fee savings vehicles. While many consumers distrust banks, people still recognize and trust savings bonds. Bonds even give consumers the unique ability to save for their loved ones through gifting. They are safe, interest-bearing, and accessible without a bank account—providing financial access and opportunity to marginalized populations we now seek to better represent on the face of our currency.

Despite all their distinct assets, savings bonds are at risk.

Today, the only way to purchase a paper saving bond is on the tax form, through the Tax Time Savings Bond (TTSB) program—and this method is not guaranteed beyond next tax season. Outside the tax-filing process, the only way to buy savings bonds is digitally, through Treasury’s online retail securities platform, TreasuryDirect.gov. Unfortunately, Treasury Direct is inaccessible to consumers without bank accounts, the technical expertise to navigate a complex registration process, or access to convenient, high-quality internet through a computer. Without the TTSB, government-backed savings products are effectively out of reach for the consumers who are least well-served by existing market options.

At Commonwealth, we are asking –

What if we reimagined government retail securities for the 21st century?

What if Treasury expanded distribution and created new opportunities for saving by developing secure application programming interfaces (APIs) for its new retail securities platform?

APIs enable the secure sharing of information between applications; for example, the Facebook API allows users to log in to other websites using Facebook credentials. In the Treasury context, secure APIs would allow innovators to “plug in” to the Treasury infrastructure and develop products that meet today’s consumers in the channels where they live and transact. Imagine a button in your bank’s mobile app that allows you to gift a virtual bond to your nephew with a single click, or a savings bond gift card you can grab off a hook at the pharmacy checkout to put inside your granddaughter’s birthday card. It’s all possible—and it’s only possible—when Treasury embraces its unique and important role in the US savings marketplace.
So we should continue to celebrate the arrival of Harriet Tubman on the new $20 bill. But as we await the new face of American money, let’s not leave behind the products we already have—those that have given generations of Americans the opportunity to start building a secure financial future.